A Prolonged U.S. Recession More Likely After OPEC Oil Cuts: ‘No Question’ – By Anna Skinner (Newsweek) / Oct 6, 2022
Rising gas prices are sure to strike Americans in their wallets, but some experts expect the return of high gas prices to have a more overarching effect on the U.S. economy.
The Organization of Petroleum Exporting Countries (OPEC) decided to cut oil production by 2 million barrels a day Wednesday, and the effects are already being felt in the U.S. Gas prices are starting to rise again, leading to increasing anxiety from Americans who have struggled with the effects of inflation this year. In addition to gas prices, grocery store costs continue to rise and the Federal Reserve recently hiked interest rates again. Much of the nation doesn’t expect inflation to improve anytime soon, and the OPEC decision could lead to a worsening American economy.
“There’s no question this will contribute to the inflation we’ve been experiencing,” University of Notre Dame finance professor Jeffrey Bergstrand told Newsweek.
OPEC’s decision is already leading to short-term increases in gas prices across the nation. As of Thursday, the American Automobile Association (AAA) put the national average for gas prices at $3.86 per gallon, roughly 10 cents above the average prices a month ago. The European Union is considering a price cap to address OPEC’s production cut. Depending on the global response, steeper gas price increases could come in a few months.
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